Analytics, Banks, Estonia, Financial Services

Annual growth of corporate debt amounted to 3.7% during the period. In the last six months the increase in corporate debt has been driven by loans taken from the domestic financial sector whose balance at the end of the first quarter was 9% bigger than a year earlier.

The volume of external loans and bonds issued in other countries at the same time decreased by 2%. The share of foreign loans in total corporate debt decreased by a couple percentage points, reaching 32% at the end of the quarter.

The volume of household loans was bigger by 5.6% than the year before. Loans and leasing obtained from leasing companies and other credit institutions grew at a considerably faster pace than bank loans. The share of loans issued by finance mediators increased to an all-time high of 9%. The 7% annual increase in household holdings of cash and deposits still outstripped loan growth, but the gap has narrowed in recent quarters.

Annual growth of both corporate and household debt outstripped nominal growth of the economy in the first quarter, but this did not have a significant effect on the debt burden of the real sector, which remained at 130% of gross domestic product.

After an interval of two years, the Estonian economy was again a net borrower in the first quarter. In most quarters since 2009 Estonian residents have placed more financial assets abroad than they have raised there, which reflects reduced investment in the Estonian economy and increased saving.